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By Robert GregoryGlobal Research Director www.planetretail.net
part of
Combating the challenge of HBC private label
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label2
We are: The leading Global Retail Analyst firm since 1995.
We analyse:
7,000 retail operations across 211 markets
100,000 retailer photos from around the world
Insightful Trend reports – eg private label, discounting trends
We serve:
80% of Top 20 Consumer Goods Manufacturers
75% of Top 20 Retailers
45% of Top 20 Technology suppliers
70% of Top 20 Financial institutions
We deliver: “Planet Retail’s unparalleled knowledge of global retail provides retailers, suppliers and investors with critical insights that create competitive advantage.”
About Planet Retail
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label3
New website launched October 2010:
Indepth retail technology information on top retailers
Free-text search
New analysis tool
Customisation – ‘My Planet’
www.planetretail.net
About Planet Retail
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label4
Contents
European HBC retailer overview
Factors driving private label growth
Range rationalisationOpportunity for brands: boost collaboration with retailers
Increasing sophisticationOpportunity for brands: emphasise brand values
New economy rangesOpportunity for brands: explore new distribution channels
Recommendations for vendors
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label5
Sector overview
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label6
European Channel Trends – by Sales, 2010-15
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label7
Top 10 HBC Retailers in Europe (EUR bn)
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label8
Top 10 HBC Retailers in Europe by Number of Stores
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label9
Fastest Growing in Last 5 Years
AS Watson
- Store numbers up by 1,128 (05-09) = +21%
- 3 new market entries taking total to 25
dm
- Store numbers up by 801 (05-09) = +50%
- Strong organic growth in Germany
- Combines competitive pricing with good shopping experience
- Entry into new markets –Romania & Bulgaria
Pharmacy Chain 36.6
- Store numbers up by 565 (05-09) = +127%
- Growth through M&A and organic openings
- Doubts over sustained growth
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label10
Slowest Growing in Last 5 Years
Schlecker
- Store numbers down by 1,366 (05-09) = -10%
- Faces fierce competition
- Stores too downmarket and lacking investment
Apoteket
- Store numbers down by 339 (05-09) = -38%
- Deregulation in Sweden forced monopoly to face competition
DA
- Store numbers down by 39 (05-09) = -7%
- Suffered from price competition in Dutch market
- Decline in numbers of franchisees
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label11
Top 10 Retailers in Europe by HBC sales (EUR bn)
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label12
Latest non-specialist developments
Carrefour planet in France launched in 2010
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label13
Latest non-specialist developments
Tesco launches Your Beauty Salon in 2011
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label14
Major Changes to HBC Sector… and why PL matters
Non-specialists expanding into area
PL to differentiate
Discount stores as key growth channel in Europe
PL to combat price
Deregulation
PL following spread of multiples
Governments squeezing margins on pharmacy goods
Higher margin PL can restore balance
Consolidation in wholesale sector (eg Alliance Boots & Celesio)
Allows efficient development and distribution of PLs
Internet
E-commerce pushing PL
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label15
Factors driving private label growth
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label16
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label17
Less space for in-store brand promotions as retailersreduce clutter
Walgreens focuses on reducing inventory.
Rolling out new store ‘Customer Centric Retailing’ format nationwide from 2010.
SKUs down from 22,000 to 18,000 and reduced clutter.
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label18
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label19
Get closer to your retail customer to avoid SKU elimination
Focused marketing and joint promotions
Brand leaders can see increase in sales
Brands can rationalise their own ranges
Exploit online channel
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label20
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label21
Brands directly challenged by increased sophistication in premium private labels
Sainsbury’s, UK
Boots, UK
Tesco
Packaging
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label22
Brands directly challenged by increased focus on execution
Tesco, UK
Tesco, UK
Boots concession,Target, USA
Professionalism
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label23
Private labels tap into ethical consumer concerns
AS Watson’s BDIH certified natural skin care at Rossmann in Germany
Sainsbury’s organichand cream, UK
dm’s ebelin eco-friendlybeauty care, Germany
Organics and ethics
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label24
Private labels establish and promote heritage
Heritage and nostalgia
dm celebrates 20th anniversary of alverde in 2009
Boots launches Original Beauty Formula in 2009 with Victorian theme
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label25
Private labels underline quality credentials
Waitrose Organic range is Soil Association certifiedLidl uses BDIH certification and its own quality assurance labelConsumer magazine testing result proudly displayed at new Schlecker
Consumer trust
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Underscore brand values in marketing messages
Private label as brands
Boots’ Soltan sun care and Serum 7 private labels sell through independent pharmacies in Europe.Boots concession at CVS drugstore in the US
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label27
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label28
Underscore brand values in marketing messages
Ethical stance
Expertise
Origin
Heritage
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label29
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label30
Renewed vigour in economy lines to capture spend from down-trading consumers
Discount Brands displayed between old economy ‘Tesco Value’ and standard ‘Tesco’ private label ranges
Discount Brands’ All About Men male grooming range
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label31
Tesco now offers several Economy private label price points
Based on prices of shampoo per 100ml on www.tesco.com, November 2009.
£0.22
BRANDS
£1.15
Economy - £0.03Standard - £0.11
Discount - £0.26
Premium - £1.07
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label32
Retailers drive private labels on three fronts
New Economy
Range rationalisation
Increasing sophistication
Exploit new channels
Boost collaboration
Emphasise values
Threat for brands Opportunity for brands
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label33
Explore opportunities to supply the discount channel
Nivea at Rewe’s Penny
L’Oreal at Lidl in Switzerland – note shelf ready packaging
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label34
Assess feasibility of supplying discounter fantasy brands
Suhada fantasy brand at Lidl
Lacura fantasy brand at Aldi
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New channels in direct-to-consumer
Brands become retailers
Internet and social media opens up new avenue
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Recommendations for vendors
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label37
Recommendations for vendors
Combat range rationalisation by boosting collaboration with retailers:
Share shopper insights
Focus marketing spend on reinforcing core brands
Secure joint promotions
Explore online channel
Combat increasing private label sophistication by reinforcing brand values and instore excitement.
Combat renewed focus on economy ranges and pressure on margins by exploring new channels:
Supply high-growth discounters looking to boost brand penetration
Supply fantasy brands to discounters
Partner with retailers for exclusive lines
Form new partnerships outside mass food and drug channel
www.planetretail.net - Planet Retail 2009Combating the challenge of HBC private label38
Contact details
United Kingdom:
Greater London House, Hampstead Road,London NW1 7EJ, United KingdomT: +44 (0)207 728 5000F: +44 (0)207 728 4999
Germany:
Dreieichstrasse 59, D-60594 Frankfurt am Main, GermanyT: +49 (0) 69 96 21 75-0F: +49 (0) 69 96 21 75-40
Japan:
Minami-Magome 5-42-3-508, Ohta-ku, Tokyo 143-0025, JapanT: +81 (0) 3 3775 4158F: +81 (0) 3 3775 4162
Robert GregoryGlobal Research Director
Planet Retail LtdT: +44 (0)207 728 4964F: +44 (0)207 728 [email protected]: Robgregonretail
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